In response to a Securities and Exchange Board of India (SEBI) directive urging investors not to make investments based on astrological predictions and other unreliable sources, we at Moneylife decided to visit a website offering astrological predictions based on the positions of the sun, moon, stars, and various other celestial bodies. It was surprising that not only did the website offer general advice about the trend for the day; it even gave the reasoning behind the prediction, based on the position of a certain planet.
This advice was not for free; however, to get “accurate and reliable” predictions on individual sectors and stocks, one had to subscribe to the service for a modest fee of around several thousand rupees a month. Apparently, more specific predictions can cost even more.
This site is not alone; a simple search on any search engine will throw up a number of similar sites, all claiming to offer the same information, in spite of a SEBI directive specifically asking investors to stay away from such unreliable sources.
These sites all have several things in common such as guaranteed predictions—one site even claiming a 95% success rate and vague predictions such as “markets will be volatile”. More detailed predictions may perhaps be found once one subscribes to this service. A certain website even offers a one year “financial astrology course” admission to which is by “selection only”.
A simple analysis shows that the predictions given by these sites are either ambiguous statements or educated guesses based on upcoming events. For example, one site predicted that on 7th May, the markets would make a possible U-turn at around 11 am; conveniently, this was also the time the verdict in the RIL-RNRL case was due.
In view of this, such statements are at best educated guesses, and at worst, reckless speculation.
The basic question that occurs to all of us is that if seasoned traders and veteran market players cannot time the markets with certainty, how can an astrologer? More importantly, if these astrologers could predict the future, then why aren’t they in the list of India’s wealthiest people, or heading successful investment houses?
The fact that many of these websites exist and are growing means that not only do people believe such predictions, but are also willing to pay a premium for these services.
SEBI went as far as issuing a note of caution “The public in general is advised not to fall prey to or be lured by such sources of information promising quick gains and unrealistic high returns. It is advised that investors should take well-informed investment decisions.”
The customers these websites are targeting are not uneducated daily wage earners, but middle-class white collar workers with access to a computer and a trading account. That these customers are not only willing to pay for these predictions, but also risk large sums of money based on this information shows that a significant number of investors believe that the biggest bull on Dalal Street is not Rakesh Jhunjhunwala, but someone far more divine.— Rudreshwar Malkani